While Jay Powell did his best to promise more QE - spiking stocks - China trade headlines spoiled the stock market party by week-end, but bonds and gold were bid.
(Click on image to enlarge)
The odds of a trade deal tumbled...
(Click on image to enlarge)
Source: Bloomberg
Interesting that Fed's Bullard said that "IT COULD BE WE ARE OVERESTIMATING TRADE WAR IMPACT"
The Fed remains its most split ever:
- Bullard: Recession straight ahead!
- Rosengren: Bubbles ready to burst!
And among all of this is the Fed's biggest liquidity crisis in over a decade (that will now continue until October 10th) - that few understand and so will just brush off... until its effects ripple out...trade accordingly.
Chinese markets ended the week lower...
(Click on image to enlarge)
Source: Bloomberg
European markets continued their bounce today, scrambling back into the green for the week...
(Click on image to enlarge)
Source: Bloomberg
The China headlines spoiled Powell's spike, leaving all the major indices red for the week (Trannies worst)...
(Click on image to enlarge)
The S&P 500 algos were seemingly desperate to pin around 3,000 - thanks in large part to the gamma from quad witch... but failed!
(Click on image to enlarge)
The S&P 500 is up 2.4% from its highs a year ago...
(Click on image to enlarge)
Source: Bloomberg
After the quant quake, momo factor stocks soared this week (after crashing 10% last week) - biggest weekly gain since May 2016...
(Click on image to enlarge)
Source: Bloomberg
ROKU was routed for the second week in a row (but is still up 240% YTD)...
(Click on image to enlarge)
Source: Bloomberg
After the bond bloodbath last week, Treasury yields tumbled this week with the long-end dramatically outperforming...
(Click on image to enlarge)
Source: Bloomberg
10Y Yields fell back below 1.75%...
(Click on image to enlarge)
Source: Bloomberg
The volume of global negative-yielding debt re-accelerated again this week...
(Click on image to enlarge)
Source: Bloomberg
Between the IPO debacle and comments from Fed's Rosengren, WeWork bonds tumbled...
(Click on image to enlarge)
Source: Bloomberg
Of course, the liquidity crisis was front and center for many. As Bloomberg's Edward Bolingbroke notes, it’s been a turbulent few days for U.S. swap traders amid the repo rate surge and the subsequent emergency liquidity measures.
(Click on image to enlarge)
Source: Bloomberg
On Thursday, the spread tightened to a record low, in a sign the market was disappointed that the Federal Reserve hadn’t introduced a permanent solution to address concerns of a funding squeeze. The two-year swap spreads rallied after the New York Fed announced more repo operations, showing that worries over financing costs were ebbing.
The spread between Effective Funds Rates and IOER blew out...
(Click on image to enlarge)
Source: Bloomberg
The Dollar Index ended the week higher but chopped around like a penny stock...
(Click on image to enlarge)
Source: Bloomberg
Yuan tumbled after today's canceled trade meeting...
(Click on image to enlarge)
Source: Bloomberg
Copper was worst on the week as PMs managed gains (silver outperforming) while crude surged...
(Click on image to enlarge)
Source: Bloomberg
NOTE - the china trade headlines sent crude and copper lower today and PMs higher
Gold bounced back up off $1500 after falling back to that level after the Saudi spike...
(Click on image to enlarge)
After the bombing of a Saudi refinery last weekend, oil prices ended up 6% on the week (well below the 15-20% initial spike)...
(Click on image to enlarge)
Palladium surged to a new record high...
(Click on image to enlarge)
Source: Bloomberg
Lean Hogs were limit down after China canceled its trip to farmland
(Click on image to enlarge)
And finally, just in case you wondered, this is the longest and deepest PMI cycle of the past 20 years
(Click on image to enlarge)
"Transitory"?
But, "buy and hold"...
(Click on image to enlarge)
Comments
Log in or sign up to join the conversation.